Deconstructing the departures at Hill & Knowlton

For Paul Holmes' analysis of the changes at H&K, and an exclusive interview with new CEO Jack Martin, click here
Nothing sparks speculation quite like a spate of agency departures. So the resignations of Hill & Knowlton global CEO Paul Taaffe, US chairman Marylee Sachs and global CMO Tony Burgess-Webb this week have raised plenty of eyebrows in the PR world.
Those familiar with the situation are likely to be less surprised, particularly after the agency merged with sister WPP public affairs firm Public Strategies (PSI) in late 2010.
The PSI merger, on paper, makes plenty of sense. For many years now, H&K has been trying to kickstart growth of its US operation, which is smaller than many of its key global network rivals. To fully understand the deal, it is tempting to turn the clock back to 2006, when Mark Penn took over Burson-Marsteller.
Another political animal, Penn’s arrival was not greeted with universal acclaim by B-M’s senior leadership. The pollster may yet have the last laugh; 2010 saw impressive growth - driven by a US operation that appears to be firing on all cylinders.
WPP would, undoubtedly, like to see similar results from PSI’s effective takeover of H&K. The agency remains the biggest network in Europe, and is in solid shape in Asia-Pacific. But the Holmes Report Global Ranking 2010 placed Hill & Knowlton in seventh position worldwide, a drop of two places. To move up on that list, North America has to grow substantially.
While Taaffe’s resignation - by all accounts - took place relatively swiftly this week, sources within the agency note that the writing was on the wall in November itself, when PSI founder Jack Martin was installed as executive chairman of H&K. That arrangement meant that Taaffe would report to Martin, who now becomes global CEO.
H&K’s new leadership will also include Dan Bartlett, the former counselor to President Bush, who became president and CEO of PSI in mid-2009. Bartlett takes charge of H&K USA and also becomes PSI chairman and CEO. PSI will undoubtedly transform H&K - the highly-rated public affairs firm is considered one of the smartest in the US. If this week is any indication, the pace of change could be brisk.